Economy: Chicago Fed National Activity Index (CFNAI) for April 2019

The Federal Reserve Bank of Chicago released its National Activity Index (CFNAI) for April 2019:

Predicted: -0.10
Actual (CFNAI): -0.45

The CFNAI is a weighted average of 85 indicators of growth in national economic activity drawn from four broad categories of data:

Production and income;
Employment, unemployment, and hours;
Personal consumption and housing; and
Sales, orders, and inventories.

The "predicted" figure is what economists were expecting, while the yellow-highlighted figure is what was reported.

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Previous Month (revised): +0.05

3-Month Moving Average (CFNAI-MA3): -0.32

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Chart: Chicago Fed National Activity Index with Business Cycles
April 2019 Update

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From Today's Report

"...Index points to slower economic growth in April

Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.45 in April from +0.05 in March. Three of the four broad categories of indicators that make up the index decreased from March, and two of the four categories made negative contributions to the index in April. The index’s three-month moving average, CFNAI-MA3, moved down to –0.32 in April from –0.24 in March.

The CFNAI Diffusion Index, which is also a three-month moving average, decreased to –0.22 in April from –0.16 in March. Thirty-three of the 85 individual indicators made positive contributions to the CFNAI in April, while 52 made negative contributions. Thirty-seven indicators improved from March to April, while 48 indicators deteriorated. Of the indicators that improved, 14 made negative contributions..."

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Understanding The CFNAI:

A zero value for the monthly index has been associated with the national economy expanding at its historical trend (average) rate of growth; negative values with below-average growth (in standard deviation units); and positive values with above-average growth.

Periods of economic expansion have historically been associated with values of the CFNAI-MA3 above -0.70 and the CFNAI Diffusion Index above -0.35. Conversely, periods of economic contraction have historically been associated with values of the CFNAI-MA3 below -0.70 and the CFNAI Diffusion Index below -0.35.

An increasing likelihood of a period of sustained increasing inflation has historically been associated with values of the CFNAI-MA3 above +0.70 more than two years into an economic expansion. Similarly, a substantial likelihood of a period of sustained increasing inflation has historically been associated with values of the CFNAI-MA3 above +1.00 more than two years into an economic expansion.

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Labels: CFNAI, Chicago_Fed, Economic_Indicators, Federal_Reserve, hard_data, inflation, National_Activity_Index